How Does The Bullwhip Effect Impact Supply Chain Distribution Operations And Can It Be Controlled?

Supply chain management is a complex process. There are several issues that can lead to the bullwhip effect and those issues can be exacerbated by delays in transmitting information, and a lack of coordination up and down the supply chain. Some causes of the bullwhip effect include:

Changes within the supply chain can disrupt the normal flow of goods and services because each change hasn’t been fully scrutinized. A firm can plan and speculate that a change with have a certain effect on the supply chain, but until those processes have been measured it is impossible to know the true cause and effect of any disruption.

America is not the only country that is recovering from an economic recession. The global marketplace is experiencing the same struggles that the recession has brought to countries across the world. Many companies have been impacted in a negative way from the recession, causing them to make some difficult decisions to survive during these turbulent times. When it comes to supply chain management, “it is remarkable how rapidly many businesses have successfully scaled back their supply chain operations in order to sustain profitability during difficult times” (Article p1)

Barilla, the leading pasta manufacturer in Italy, faces increasing problems related to demand fluctuation. Their distributors also suffer from high inventory holding costs and low service levels on the other hand. This report explains, why the company and their distributors are troubled with this situation and how Barilla intends to solve it. The problem Barilla experiences is called the “Bullwhip Effect”, i.e. that demand variability increases when moving up the supply chain. Several factors enforce this Bullwhip Effect, e.g. high lead times, poor demand forecasting, and batch ordering. In this report we will point out, that exactly those aspects can be identified as the underlying reasons for Barilla’s problems. In a

This affects the whole company with specific attention to customer service, warehouses, and IT to keep the business moving.

The authors also write about the inability to no longer be able to customize products and services to customer needs due to shipping container space limitations and month long order times limiting flexibility and responsiveness of supply chains (p. 1). They went on to say that due to these inflexible supply chains customers would no longer be able to receive goods, services, and products tailored to their needs although I did not find conclusive enough evidence in the writing to agree with its inclusion. I believe this portion of the article was an attempt to persuade the reader by using examples of possible frustrations customers would experience. Although these issues may be true, I did not see the research necessary to support the claims.

According to Wobbly Wheels (WW) Distribution Company, their environment of operation is affected by several other business environment factors like the effects on its personnel and the technological implications of the system.

Without 100% deliverables on-hand this could create a bullwhip in the supply chain. A bullwhip effect is point to a lack of synchronization among supply chain members. This happens when changes in sales ripples backward (e.g. bullwhip) because the supply patterns do not match the demand patterns causing shortages and delays.

Having no insight of how supply chain management works and using the Responsive E-beer Game simulation gave me a keen view on how the supply chains. Team members placed materials orders to their neighbors in an upstream response to demand from their downstream neighbors. The objective of the whole game was to reduce the cost of fulfilling demand. Cost was measured on backlogs and inventory. Retailer, wholesale, distributor, and manufacturer all play their roles in getting products out to customers. Playing several rounds with team mates made me realize that throughout the supply chain that everyone needed to be on the same page on how much product needed to be ordered through the different channels.

In the first round of the root beer supply chain game there was a lot of confusion, mystery, and chaos; and the data showed that (Please see separate excel spreadsheet of data with mean, standard deviation, and variation calculated). Analysis of the data shows a classic bullwhip effect; the customer places an order and order fluctuations build up through the supply chain. You can also see that these effects are magnified as you get farther from the customer up the supply chain. This holds true for mean, standard deviation, and variation. Without proper communication between the supply chain, it felt like every group was working blind and three steps behind. This was due to

The global supply chain in the retail industry has witnessed changes and shifts which have led to opportunities and challenges for the involved players. This has occasioned shifts in trade and consumer behavior patterns. Among these are global growth patterns brought about by explosion of more cities and thus growth in infrastructure. There have been flexible supply chain trends which have enabled retail operators to adapt effectively to unexpected circumstances and changes. Moreover, globalization has changed the way retail supply chain is managed as more mature markets emerge to provide logistic and standard solution needs of the businesses. Conversely, near-shoring has

What is the right supply chain for your product ? is the question asked by Marshall L. Fisher in his article titled, “What is the Right Supply Chain for Your Product ?” published in March-April 1997 issue of the Harvard Business Review. Author raises the question stating the fact that new ideas and technology implemented haven’t lead to improved performance. Performance has not become better but rather in at least some cases, has worsened due to costs rocketing to unprecedented levels.

Brunswick Distribution started as a small distribution company 10 years ago when Alex Brunswick stated using his grandmothers shed. The company further grew and moved into a 20,000 square-feet leased facility.

I spend pretty long time analyzing Ford’s current existing supply chain condition. I immediately became aware of its highly complex environment. This high level of complexity combined with other external and internal factors. These factors push Ford to search for the best solutions in order to overcome the costly supply chain issues that they are facing and may continue encounter in the future. Ford’s major challenges in their current supply chain system is:

“Considering present market conditions and the way in which industry demand fluctuates nowadays, firms willing to remain operationally efficient will become more reliant on supply-chain management, This is one of the main reasons for which Wal-Mart has been capable of growing at an annual rate of 15.4%.”（Aleksandrov）